Today was a pretty good stress test for Folyum.
The US Growth ETF moved quite a bit, ending around +3.9% over 24h, but the market price still stayed basically aligned with NAV, with only around 0.4 bps difference in the latest snapshot.
The part I care about more is what happened inside the vault.
Even with that movement, the portfolio stayed very close to its target allocation, with a maximum drift of only ~0.20% across the five assets.
This is exactly the idea behind Folyum: arbitrageurs are not only closing the gap between market price and NAV. The same mint/redeem flow also helps rebalance the ETF by bringing underweight assets in and pushing overweight assets out.
So instead of having one mechanism for price discovery and another separate process for rebalancing, Folyum tries to make both happen through the same market activity.
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